Establish the route’s funding before allocating its rewards

Draw a dated cash account from the present through the point where the route becomes self-supporting, refinanced, sold or closed. Identify the peak need, not only the final surplus. Obtainable interim finance must cover that need before its due dates, including negotiation and implementation costs. If no available arrangement does, retain the proposed route as conditional or remove it from the actionable set.

New money creates a claim or ownership interest. Recover its net proceeds, interest, fees, security, ranking, draw conditions and treatment if the plan fails. Existing creditors may have to consent to the use of collateral or a changed priority. The finance practitioner’s model cannot grant that priority. FDM supplies actual claims and event rules; the institutional source supplies which proposed treatment is legally or contractually attainable.

Do not count the same financing effect twice. The advance is a source for the interim cash account, not free value to distribute to old claimants. Its repayment or ownership participation reduces what they can receive. If a supplied enterprise or recovery value is already net of the interim claim or process cost, do not deduct it again. Conversely, if it is a gross value before those claims, make the deduction before comparing old creditors’ recoveries.

Debt capacity after restructuring must fit the repaired operation and its uncertainty. Turning unpaid principal into a larger later promise can increase the face claim without increasing expected payment. A debt-for-equity conversion may reduce mandatory service but transfers a residual interest whose value and control differ from cash. FIN.10–11 supply the financing construction; FIN.22 connects it to claimant recovery and the available distress routes.